After Redrow 'shocker', rivals have more positive news for Scotland

Published on Thursday 21 April 2011 15:43

TWO major housebuilders offered encouragement on the state of the new homes market yesterday, after this week's shock news that Redrow is to sell its Scottish operation.

The UK's second and third largest housebuilders, Persimmon and Taylor Wimpey, both reported positive trends for sales and prices in updates to investors.

Persimmon said sales reservations were up 12 per cent compared to last year and its order book stood at 1.14 billion, the same level as this time last year.

Jeff Fairburn, managing director of the firm's northern division - which includes Scotland - said that while not quite as strong as the south of England, sales and interest levels north of the Border had been "reasonable".

He said: "It's been a good start off the back of a poor end to last year. We've had a good number of visitors."

Fairburn said the builder had a number of new sites in Scotland, including a push north to Portlethen in Aberdeenshire, where the market was particularly strong.

He said two-storey, high-quality housing was the most popular, pushing the division's average selling price to 187,000.

Taylor Wimpey, which recently agreed to sell its North American business but is waiting regulatory approval, was similarly upbeat. It said it was performing in line with expectations and that its order book stood at 5,681 homes, up 21 per cent from 4,684 at the turn of the year.

The group said it has signed up lenders to its new mortgage product "Take 5", which only requires a 5 per cent deposit on a property and was launched in February. Taylor Wimpey is now operating from more than 300 sales outlets, compared to 290 this time last year and has "encouraging trends" in visitor levels, sales rates, cancellation rates and sales prices.

The group said it expects the sale of its North American business to complete by the end of the second quarter of 2011. The firm will use the proceeds to reduce its 817 million debt pile.

"We expect a relatively flat market in the UK over the remainder of 2011," the firm told investors.

"We expect to make further progress in delivering value from our existing land portfolio and the completion of the disposal of our North American business will put us in a strong position to add new sites where attractive opportunities are identified."

The updates come after figures revealed mortgage lending soared by 21 per cent during March, month-on-month, as both buyers and people remortgaging returned to the market.

On Tuesday, Redrow dealt a blow to the housebuilding sector north of the Border as it announced plans to pull out of the country and put its loss-making Scottish business up for sale.The Welsh firm said it was unable to generate "acceptable" returns and was retreating to focus largely on London and the south-east of England, as it reported "encouraging" sales across the rest of its UK business.